CBA increased its business loan portfolio by 9.1% — a $3.7 billion rise — in the three months to March 31. That expansion, significantly above the industry average, came as part of a deliberate strategy to channel more capital into high-priority sectors, including infrastructure, healthcare, logistics, defence, and residential development.
"We’re seeing strong demand for business credit, and the pipeline looks robust into the end of June," said CBA CEO Matt Comyn, who has signaled ongoing investment in sectors aligned with the government’s economic agenda, including housing supply and critical minerals.
CBA’s aggressive growth in commercial lending is putting pressure on NAB, which holds an estimated 21% of the business banking market. While NAB still leads, its most recent half-year results highlighted the intensifying rivalry. CEO Andrew Irvine acknowledged the mounting competition, declaring, “Everyone else wants what we have, and we are not going to give it up without a hell of a fight.”
CBA’s 1.3-times-system growth rate in business lending signals a direct challenge to that dominance. Though NAB recorded lending growth of 6% in its small business portfolio, CBA’s broader surge has caught the attention of investors and analysts.
CBA posted a 6% rise in quarterly cash profit to $2.6 billion, slightly ahead of analyst expectations. The net interest margin — a critical measure of lending profitability — held steady, while overall income increased by 1%, supported by lending and trading volume growth.
However, signs of strain are emerging. Loan impairment expenses rose to $223 million, with increases in non-performing and “troublesome” loans. Arrears in the business book have begun to surface in commercial property, wholesale trade, and manufacturing — sectors still grappling with higher interest rates and uneven demand.
Consumer credit stress is also climbing. Home loan customers more than 90 days behind on repayments now stand at 0.71%, up from 0.44% two years ago and in line with pre-pandemic levels. Personal loan arrears reached 1.51%, while 0.7% of credit card customers were significantly overdue.
Comyn said economic pressures remain but expressed confidence that easing inflation and anticipated interest rate cuts would bring relief. “We remain focused on proactively engaging with our customers and offering support where it’s needed most,” he noted.
Speaking from Seattle — where he is attending a Microsoft AI conference — Comyn reflected on global conditions, saying the U.S. outlook was less gloomy than anticipated. Many U.S. financial institutions, he said, are maintaining their risk settings despite heightened geopolitical uncertainty and ongoing tariff tensions.
Amid global trade volatility, CBA sees opportunity at home. Comyn emphasized the importance of national supply chain resilience and strategic industries, particularly critical minerals, which he described as a “hard sector to bank” but one with growing importance in Australia’s economic future.
CBA shares climbed 0.7% to $167.29 on Wednesday, just shy of the all-time high of $169.75 set earlier this month. Analysts at UBS remain optimistic about the bank’s outlook, particularly given the strength of its retail distribution network. Around 68% of new home loans are now being written through CBA’s proprietary channels — its branches and online platforms — reinforcing margins and customer retention.
The bank’s ability to maintain what analysts call “positive jaws” — revenue growth outpacing expense growth — continues to underpin investor confidence. UBS projects a 5.2% increase in cash earnings per share for the 2025 financial year, the strongest among the big four banks.
Meanwhile, NAB’s cautious stance — particularly in agricultural lending — has tempered its growth rate, though its deposit base remains robust. NAB also reaffirmed its conservative balance sheet approach in light of continued geopolitical volatility and strong foreign investor interest in Australian bank assets.
Both banks are entering a period of strategic recalibration. CBA is pressing its advantage in business lending, while NAB is focused on defending its lead by leveraging deposit strength and refining its lending mix. As the Reserve Bank considers further rate cuts and the Albanese government ramps up housing and infrastructure spending, the battle for business lending supremacy is only expected to intensify.
Key Figures:
CBA Priority Sectors: Infrastructure, healthcare, logistics, defence, hospitality, critical minerals, and housing construction.
Market Context: NAB maintains leadership in business lending with 21% market share but faces strong competition from CBA and Westpac, the latter of which recorded 14% growth in small business lending.
